[00:00:15] Speaker ?:
Hmm.

[00:00:32] Speaker 02:
Why do I have to have a new camera out?

[00:00:35] Speaker 02:
That's right.

[00:00:39] Speaker 02:
Next case is Monkey Media versus Apple et al.

[00:00:43] Speaker 02:
2016-15-58.

[00:00:45] Speaker 02:
Mr. Christian.

[00:00:54] Speaker 01:
May it please the court.

[00:00:56] Speaker 01:
Monkey Media appeals the board's decision on three issues.

[00:00:59] Speaker 01:
The first issue I want to address is the priority of the Spacepasotto reference.

[00:01:04] Speaker 01:
and specifically the board's finding that Monkey Media did not exercise reasonable diligence in reducing its invention to proundness, such that it could not swear behind the Spasado reference.

[00:01:15] Speaker 01:
The supplemental citation of authority that I filed recently with this court calls the court's attention to a perfect surgical technologies decision that this court issued last November.

[00:01:25] Speaker 01:
And I think that decision clearly sets the standard that the board should have applied in this case and did not.

[00:01:32] Speaker 01:
the court in perfect surgical technologies criticized the board in that case for applying an overly strict legal standard.

[00:01:40] Speaker 03:
Mr. Baer asserts that an unspecified number of people who aren't named worked, quote, steadily, consistently, or continuously on various projects that purportedly led to the reduction of practice of 143.

[00:02:00] Speaker 03:
But he only identifies four dates

[00:02:02] Speaker 03:
within the critical period.

[00:02:05] Speaker 03:
He doesn't explain when the work was done or what work was done with any specificity.

[00:02:10] Speaker 03:
How do you apply that?

[00:02:12] Speaker 01:
Well, I disagree that he identifies just the four dates.

[00:02:15] Speaker 01:
He identifies the four stages that the prototype had to go through to completion.

[00:02:20] Speaker 01:
He identifies the date that the reduction to practice began, which was September 1st of 1995, when they signed the contract setting out the work schedule that defined the four stages of what had to be done with each.

[00:02:33] Speaker 01:
And yes, the invoices for each of those four stages were certain dates.

[00:02:37] Speaker 03:
Several of those documents relate to work outside the critical dates.

[00:02:45] Speaker 01:
Some of the work relates the four stages that I'm talking about all relate to the critical period, Your Honor.

[00:02:52] Speaker 01:
They begin in September 1995, right when the critical period begins.

[00:02:56] Speaker 01:
There was other work done outside the critical period leading up to

[00:03:01] Speaker 01:
this agreement to reduce the prototype.

[00:03:04] Speaker 03:
Yeah, the four stages are things like rough electronic assembly of the storyboard, but it doesn't tell us what that means.

[00:03:15] Speaker 03:
It doesn't tell us what constitutes rough electronic assembly or how it relates to 143.

[00:03:22] Speaker 03:
Invoices identify dates on which flat fee work was built with four stages, but they don't add any detail about

[00:03:30] Speaker 03:
what activity was involved in completing each stage.

[00:03:34] Speaker 03:
And Mr. Baer acknowledged at J968 that the invoices aren't a reliable measure of the work performed because they were issued before the work was completed.

[00:03:49] Speaker 01:
Let me address several of those points, Your Honor.

[00:03:51] Speaker 01:
The first one, the first stage completion is attached to Mr. Baer's affidavit.

[00:03:56] Speaker 01:
That's the program specification.

[00:03:58] Speaker 01:
That's the 20 page outline that describes exactly what the prototype is going to look at and sets the framework that they were going to build on.

[00:04:10] Speaker 01:
Mr. Baer testified that using that specification, MonkeyMedia began creating the functioning Baguette prototype.

[00:04:16] Speaker 01:
He attached the end source code, which is 50 plus pages long, and describes that the process of

[00:04:24] Speaker 01:
assembling the video and the other images and programming the... But none of this is correlated with claim limitations.

[00:04:33] Speaker 02:
Your Honor, I... That's what diligence requires, showing an activity on specific dates in relation to claim limitations.

[00:04:43] Speaker 01:
He attached a walkthrough, video walkthrough of the prototype and explained both on the conception side and on the reduction to practice side

[00:04:52] Speaker 01:
how the claims were found in those two signposts.

[00:04:57] Speaker 01:
In between them, he testified that over those four months, he and his team at Monkey Media worked steadily and continuously to produce the prototype.

[00:05:05] Speaker 01:
$100,000, four stages, invoices showing that the work was invoiced throughout that critical period.

[00:05:14] Speaker 01:
and that further work was done to debug the prototype and get it ready for final presentation.

[00:05:19] Speaker 02:
Well, it's work toward a reduction to practice, not billing that comes.

[00:05:26] Speaker 01:
Conceited, yes.

[00:05:26] Speaker 01:
But the billing shows that the work was done over that period.

[00:05:30] Speaker 01:
In other words, when a stage was completed, it was invoiced.

[00:05:33] Speaker 01:
And the work was ongoing as he proceeded to the reduction to practice, to the production of the prototype.

[00:05:43] Speaker 01:
And the fact that the prototype reduced the invention to practice with all the claim limitations.

[00:05:48] Speaker 01:
And the conception at the beginning that he showed with his other story boards also did the same, shows that in the interim, as he testified to in his affidavit, that he was diligently working to reduce the invention to practice.

[00:06:02] Speaker 01:
The board's erroneous legal standard led it to identify certain gaps and focus on those gaps of inactivity.

[00:06:09] Speaker 01:
The first gap in particular was erroneous.

[00:06:12] Speaker 01:
Because the program specification itself, the document that was attached, contains several dates in October showing that it was revised and produced during that alleged gap.

[00:06:23] Speaker 01:
And so we believe that the board's erroneous and overly strict legal standard led it to make unsubstantiated fact findings regarding the diligence that docu media showed during that critical period.

[00:06:35] Speaker 01:
And that this court should reverse and remain so that the board can consider the entire evidence under the proper standards.

[00:06:42] Speaker 01:
Now, the second issue that we have is whether the invention is obvious in light of Davenport, particularly whether the transition claim limitations.

[00:06:54] Speaker 03:
You can see at some point in Pellin's brief 28 that Davenport's checkerboard effect blends content from two sources, thus teaching the transition

[00:07:09] Speaker 01:
We don't concede that, Your Honor.

[00:07:11] Speaker 01:
We can see that a checkerboard transition can involve two different images.

[00:07:15] Speaker 03:
Well, you say it may well have been proper for the PTAB to find that the checkerboard effect blends content from two different sources.

[00:07:23] Speaker 01:
OK.

[00:07:23] Speaker 01:
Two different images is what we were talking about there.

[00:07:25] Speaker 01:
But what the Davenport or the checkerboard transition, as Todd and Davenport does it do, is involve the playing of two streams of content, segments of content at the same time.

[00:07:37] Speaker 01:
That is what the inventive aspect of the 143 patent is that is not present in Davenport.

[00:07:44] Speaker 01:
And that is found in her specification, where she consistently talks about how the transition effect has to be applied at the end of one segment or the beginning of another segment, and that her invention itself always involves one segment at a time claim.

[00:08:00] Speaker 01:
And that when a user elects a... Where did the relevant claims of the 143 patent

[00:08:07] Speaker 03:
require the simultaneous playing of video segments?

[00:08:11] Speaker 01:
It's claim nine, I believe, your honor.

[00:08:18] Speaker 03:
It's claim nine, recite.

[00:08:19] Speaker 01:
The transition comprises playing a portion of the main content simultaneously with playing a portion of the expansion content.

[00:08:25] Speaker 01:
Right.

[00:08:26] Speaker 01:
And so that is what Davenport doesn't do.

[00:08:30] Speaker 01:
Davenport requires that the main content stop before the expansion content begins.

[00:08:37] Speaker 01:
Figure 4a in the specification of the 143 illustrates the concept that is at issue here.

[00:08:44] Speaker 01:
It shows a thought bubble, which is the cue that is selected, and then as a transition, as it expands bigger to take up the whole screen, the expansion consciousness starts to play while the main content is still playing behind.

[00:08:57] Speaker 03:
I don't understand, though.

[00:08:58] Speaker 03:
Where in that language does it require the playing of video content?

[00:09:05] Speaker 01:
Well, I guess,

[00:09:08] Speaker 01:
The content can be, it's an audio-visual content.

[00:09:16] Speaker 03:
And in any case, Davenport discloses the use of transitioning effects in videos.

[00:09:23] Speaker 03:
And that's column six, lines 26 to 32, discussing the creation of video segments.

[00:09:30] Speaker 03:
And column nine, lines 37 to 67, discussing the use of transition effects in segments.

[00:09:38] Speaker 01:
So but she doesn't discuss the two segments playing at the same time.

[00:09:42] Speaker 01:
And that is what Mr. Baer's invention involved, simultaneous playing of the main content and the expansion content.

[00:09:50] Speaker 01:
Davenport testified in her specification supports that that is something that she couldn't do back in 92 when she was inventing her invention.

[00:09:59] Speaker 01:
And her testimony as well that the board did not consider

[00:10:05] Speaker 01:
was that she actually viewed the prototype at the time that Mr. Baer reduced it to practice and specifically recalled phrasing the type of transitions that they were able to achieve.

[00:10:16] Speaker 03:
Yeah, Davenport's an interesting witness, all right.

[00:10:19] Speaker 01:
So those are the kind of things that show that the transitions that the monkey mania was able to achieve in the 143 are not obvious in light of Davenport and the board aired in

[00:10:33] Speaker 01:
both the way it interpreted her specification and what she was claiming and in her testimony about what she witnessed contemporaneously at the time of the baguette prototype.

[00:10:43] Speaker 01:
And again, the meetings with her are documented in those invoices that we talked about earlier in the reduction of practice.

[00:10:53] Speaker 01:
They happened back there in 1996.

[00:10:55] Speaker 01:
She actually witnessed the prototype and saw what Mr. Baer and his other inventor were able to achieve at that time.

[00:11:04] Speaker 01:
The last issue is the queue container and the board's claim construction of that term.

[00:11:11] Speaker 01:
We contend that the construction of the term is not consistent with the 143 specification, that it was too broad because it encompasses a queue container that could be the entire screen that the viewer sees.

[00:11:26] Speaker 01:
And we contend that that's too broad because the queue container has to be a defined shape within the screen that contains the queues.

[00:11:35] Speaker 01:
Again, the specie.

[00:11:37] Speaker 03:
But the board didn't affirm the examiner's obviousness findings on the basis of DVD demystified.

[00:11:46] Speaker 03:
It affirmed based on Sposato and Davenport alone.

[00:11:53] Speaker 03:
Since they didn't construe.

[00:11:55] Speaker 01:
Your Honor, that's right.

[00:11:56] Speaker 01:
And we say Sposato is not prior art to begin with.

[00:12:02] Speaker 01:
that we believe really implicates the Q container is the DVD demystified.

[00:12:07] Speaker 01:
But regardless, the construction that the board reached was too broad.

[00:12:11] Speaker 01:
The figures in the specification describing the Q container all show it as a cup or an image within the screen.

[00:12:20] Speaker 01:
Nothing supports a construction that would support it as broad as the entire screen.

[00:12:26] Speaker 01:
I'm into my rebuttal time, so I'd like to save some time.

[00:12:36] Speaker 00:
Thank you, Your Honor.

[00:12:36] Speaker 00:
May it please the court.

[00:12:38] Speaker 00:
The board's decision should be affirmed in its entirety.

[00:12:40] Speaker 00:
Now I'd like to first start with diligence.

[00:12:43] Speaker 00:
The board correctly found that Monkey Media's evidence was tantamount to a mere assertion of diligence.

[00:12:49] Speaker 00:
And what Monkey Media effectively asks here is for this court to reweigh the evidence.

[00:12:54] Speaker 00:
But not only is that improper under the substantial evidence standard of review, there's effectively no evidence for this court to reweigh.

[00:13:02] Speaker 00:
If we look at the evidence as a whole, they have nothing more

[00:13:06] Speaker 00:
than a few conclusory assertions of working steadily or working continuously in their inventor declaration.

[00:13:12] Speaker 00:
And then they have some vague documentation to which they don't explain what activities were occurring, when those activities for the most part were occurring, and how at all they related to the alleged reduction to practice of the claimed invention, which here is directed to the transmission of interactive content to a player.

[00:13:33] Speaker 00:
All their evidence really shows, at most,

[00:13:36] Speaker 00:
is that they were working on a prototype for some sort of optical disc to be read by a player.

[00:13:42] Speaker 00:
And there's no evidence at all here that they were actually working to the reduction to practice of a transmission system of content that's going to be played on a player.

[00:13:52] Speaker 00:
I'd like to address perfect surgical, because there was that rule 28 J letter that was filed on Friday.

[00:13:59] Speaker 00:
And this case is nothing like perfect surgical.

[00:14:02] Speaker 00:
There was not a legal error.

[00:14:04] Speaker 00:
in this case, like there was in Perfect Surgical, where the board appeared to apply a stringent standard where it required the inventor to account for all the periods during the critical period with actual inventive activity.

[00:14:18] Speaker 00:
In other words, it did not allow there to be periods of inactivity that could have been excused, such as in Perfect Surgical, the inventor's 80-hour work week with respect to surgeries, four to six surgeries a week.

[00:14:31] Speaker 00:
And it also did not allow

[00:14:33] Speaker 00:
the inventor to count the period of time in which the attorney, the patent attorney, was actually working on the application to reduce it to practice.

[00:14:43] Speaker 00:
And so you had a fundamental legal error in that case.

[00:14:46] Speaker 00:
There's no such error in this case.

[00:14:48] Speaker 00:
The board was very clear that it recognized that periods of inactivity could be consistent with the diligence standard so long as they were explained.

[00:14:58] Speaker 00:
But what Perfect Surgical does not say, it does not allow

[00:15:02] Speaker 00:
an inventor to simply say that they were working steadily, that they were working consistently, and then have that be enough by simply then submitting some vague documentation to sort of show that there might have been some activity that was going on during the critical period.

[00:15:18] Speaker 00:
The second point is that perfect surgical really was a rule of reason case.

[00:15:21] Speaker 00:
There was very rich inventor testimony in that case.

[00:15:25] Speaker 00:
It was an IPR.

[00:15:26] Speaker 00:
And so what you had in that case was an inventor declaration that was more specific

[00:15:30] Speaker 00:
as to specific activities that were occurring, as to specific dates.

[00:15:35] Speaker 00:
There was the attorney declaration that was submitted.

[00:15:38] Speaker 00:
There was deposition testimony from the inventor as well.

[00:15:41] Speaker 00:
And so it was a fundamentally different case where you had all this evidence from the inventor himself that needed to be corroborated.

[00:15:49] Speaker 00:
And in that situation, this court held that you cannot nitpick the evidence when you're doing the corroboration.

[00:15:56] Speaker 00:
You apply a rule of reason test to see whether or not these specific

[00:16:00] Speaker 00:
facts that are alleged by the inventor are corroborated.

[00:16:04] Speaker 00:
That's not what happened here.

[00:16:05] Speaker 00:
There's really nothing that can be corroborated when you look at Bayer's declaration, because it is so nonspecific as to the activities that were occurring during the critical period.

[00:16:17] Speaker 00:
And I'd just like to touch upon the fixed-fee contract itself.

[00:16:21] Speaker 00:
Yes, there was a fixed-fee contract which had vague language to design, to develop, to create this prototype, and it had four stages.

[00:16:29] Speaker 00:
But there's no indication as to how much time each of these stages took, what activities were undertaken to create all these activities.

[00:16:38] Speaker 00:
And so we don't know if this was something, these are four stages that could have taken everybody else in the whole world one month to do, or if it's something that should take four months to do.

[00:16:47] Speaker 00:
There's no evidence in which a fact finder can make that determination.

[00:16:51] Speaker 00:
And when we're operating under the substantial evidence standard review here, the issue isn't whether or not there is some evidence in which the board

[00:16:58] Speaker 00:
could conclude that there's diligence, it has to be that it would be unreasonable for the board on this meager record to conclude that there was no diligence.

[00:17:07] Speaker 00:
Now, I know that my friend mentioned that there was a gap period that the board mentioned in which there might have been activity that actually occurred.

[00:17:16] Speaker 00:
I think it's important to actually look at what the board said about that gap period, because I think that's very important.

[00:17:26] Speaker 00:
appendix nine of the board's decision.

[00:17:29] Speaker 00:
It says it discusses a gap period of September 30th to October 23rd.

[00:17:33] Speaker 00:
But what it's looking at there is the hourly work.

[00:17:37] Speaker 00:
And it's saying there was no hourly work even built in that period.

[00:17:41] Speaker 00:
And then it went on to say that we're going to look at the contractor agreement, which has those four stages.

[00:17:48] Speaker 00:
And there's nothing that's specific.

[00:17:50] Speaker 00:
The contract agreement does not specify any specific dates that any activity was actually performed

[00:17:56] Speaker 00:
and what any alleged activity might have been.

[00:17:59] Speaker 00:
And so when it's addressing that gap period, it's saying there was no hours billed, and we can't tell from the contractor agreement what was going on during that period of time.

[00:18:10] Speaker 00:
We don't know when that program documentation was created.

[00:18:13] Speaker 00:
We don't know how long it took.

[00:18:15] Speaker 00:
We don't know all the activities that might have been required to create it.

[00:18:19] Speaker 00:
So there's simply nothing that a fact finder could latch on there to find reasonable

[00:18:25] Speaker 00:
diligence in this case.

[00:18:27] Speaker 00:
And I think that's particularly true when you look at the fact that you need to have the diligence activity directly related to the reduction to practice of the claimed invention, which here are transmission claims.

[00:18:39] Speaker 00:
We know from Baer's declaration at A 1784 that they really didn't even have any transmission system in mind, because in his declaration he just said that they had a long-term goal of transmission.

[00:18:55] Speaker 00:
And there's no evidence here in any of this diligence evidence that they were directing this towards a transmission system.

[00:19:03] Speaker 00:
Now I'd like to just briefly turn to Davenport and then the Q container.

[00:19:08] Speaker 00:
I think it's absolutely correct that the claim language in claim nine just says playing a portion of the main content simultaneously with playing a portion of the expansion content.

[00:19:21] Speaker 00:
And that's what Davenport discloses because it talks about visual

[00:19:25] Speaker 00:
transitions, visual progressions, and it talks about checkerboard and Venetian blinds in which one image and another image are going to be playing at the same time.

[00:19:34] Speaker 00:
But more importantly, we had an expert that testified, and that's at A1432-33, in which he said that a person of ordinary skill in the art reading this prior art would understand it to disclose these types of, you know, progressions.

[00:19:49] Speaker 00:
And so when we have

[00:19:51] Speaker 00:
Davenport's testimony on the other side, this is simply just a battle of the experts as to what the prior art discloses.

[00:19:58] Speaker 00:
Under the substantial evidence standard review, the board's decision is well supported by the evidence here.

[00:20:05] Speaker 00:
And then lastly, I'd like to turn to the Q container issue.

[00:20:08] Speaker 00:
Again, I don't believe the court needs to reach this issue.

[00:20:11] Speaker 00:
The rejection was based upon Spasado and Davenport.

[00:20:15] Speaker 00:
They've waived any argument with respect to Q container in Spasado, since they didn't raise it in their opening brief.

[00:20:21] Speaker 00:
So there's nothing really to address here at all on that claim construction issue.

[00:20:25] Speaker 00:
If the court wanted to address it under BRI, the construction is entirely reasonable.

[00:20:30] Speaker 00:
You're talking about a classic case of a patent owner that's trying to narrow its claim down to a small set of examples, specifically a figure in the specification, like this cup, for example, that contains different cues.

[00:20:44] Speaker 00:
The board's construction here was entirely reasonable.

[00:20:47] Speaker 00:
Any bounded area, any component that contains

[00:20:50] Speaker 00:
cues, and that's entirely consistent.

[00:20:52] Speaker 03:
But they didn't construe it in light of PBD being demystified.

[00:20:58] Speaker 00:
You're right.

[00:20:58] Speaker 00:
Yes, Your Honor.

[00:20:59] Speaker 00:
I mean, so I think that the issue, the court should not even address this issue.

[00:21:03] Speaker 00:
If there are no further questions, then we would ask the court to affirm it.

[00:21:07] Speaker 02:
Thank you.

[00:21:07] Speaker 02:
Mr. Matsui, Mr. Christian has a few minutes of rebuttal time.

[00:21:18] Speaker 01:
Your Honor, in perfect surgical, the court held that the purpose of the diligence analysis is to make sure that the invention was not abandoned or unreasonably delayed.

[00:21:28] Speaker 01:
And the evidence here shows that Mr. Baer met that standard.

[00:21:33] Speaker 01:
There was a contract which set out a specific schedule, begin September 1, end by the end of the year.

[00:21:40] Speaker 01:
And he explained how his company met that schedule by producing the prototype.

[00:21:45] Speaker 01:
There's no evidence or suggestion that

[00:21:47] Speaker 01:
he ever unreasonably delayed or picked up some other project or abandoned this project, he followed it through to completion to produce the prototype that reduced the claimed invention to practice.

[00:21:57] Speaker 01:
And the testimony that he provides about conception, extensive testimony about conception, including the transmission in his Rule 131 and supplemental declaration as well, and reduction of practice explains how each of the claims were met, both at the conception stage and the reduction of practice stage.

[00:22:14] Speaker 01:
And the evidence that he provided is sufficient

[00:22:16] Speaker 01:
under the perfect surgical standard to support a finding that he was reasonably diligent.

[00:22:21] Speaker 01:
And the way the board applied that legal standard for reasonable diligence here was incorrect.

[00:22:26] Speaker 01:
And it needs to be remanded to the board for determination in the first instance of whether the reasonable diligence standard was met or not.

[00:22:35] Speaker 01:
With respect to the transition claims,

[00:22:41] Speaker 01:
Davenport, in addition to her specification, attaches source code to the back of her patent that explains exactly how she created these transitions that she's talking about in the specification and all the segments.

[00:22:53] Speaker 01:
Our expert, Dr. Loy, examined that source code.

[00:22:57] Speaker 01:
It confirmed that all of the segments that she has produced in the source code disclosed in the patent require

[00:23:06] Speaker 01:
one segment at a time to play.

[00:23:07] Speaker 01:
They don't have any overlapping segments playing at the same time as required by the transition claims that issue Mr. Baer's patent.

[00:23:16] Speaker 01:
Their expert described the transition claims in terms of 1999's time frame, but at the time that Davenport created her transitions,

[00:23:29] Speaker 01:
She testified, and there's no evidence otherwise, that it was not possible to create the type of overlapping transitions that Mr. Baer invented at a later time in 1999.

[00:23:39] Speaker 01:
And there's no other reference cited that would support an obvious determination in conjunction with that report in that regard.

[00:23:47] Speaker 01:
And finally, the Q container claims, we did cite the, I'm sorry, we did cite that the

[00:23:57] Speaker 01:
The report was an error in relying on Spasato, as Spasato itself is not prior art for the reasons we stated.

[00:24:02] Speaker 01:
And so we think that all that should go back to the board to determine in the first instance.

[00:24:07] Speaker 01:
The board's construction remains incorrect, legally incorrect, because it was too broad.

[00:24:12] Speaker 01:
In addition to the figure that describes the Q container, there is a figure that shows a Q appearing in an entire screen, figure 4A.

[00:24:21] Speaker 01:
And if Q container could encompass that entire screen, was broad enough to reach the board's construction,

[00:24:27] Speaker 01:
then the specification would refer to that as a Q container as well, but it doesn't do so.

[00:24:32] Speaker 01:
And that's further support in the specification for the type of construction that we are urging, and suggests that the, indicates that the board's construction itself is too broad and unreasonable.

[00:24:43] Speaker 01:
Thank you.

[00:24:44] Speaker 02:
Thank you, Mr. Christian.

[00:24:45] Speaker 02:
We will take the case under review.